Financial News asked Europe’s top executives about their biggest concerns for the year ahead.

Apart from the cricket on Sky Sports? It’s the overwhelming detail of the continuing regulatory response to the financial crisis. But for all the hyperactivity of policymakers I can’t help this nagging feeling that the real issues of how to bring about a return to stability may not be addressed until we have faced another crisis.

Samir Assaf
Chief executive of global banking and markets, HSBC

The dogmatic and negative approach that some politicians and regulators have towards the role and size of the banking industry. This destructive stance could have an unwelcome impact on the economy and on growth, leading to a significant risk of protectionism and serious conflict.

Irrational behaviour by private equity firms nursing huge losses and equally having to “use it or lose it” with new money.

Bob Parker
Senior adviser, Credit Suisse

Trying to identify the next black swan. Should we be worrying about geopolitical issues such as North Korea and Iran, fiscal issues such as the Bush income tax cuts not being rolled over, monetary issues such as the risk of the Chinese “over tightening”, banking issues such as identifying how much eurozone sovereign debt the banks own or restructuring issues such as where investors will be forced to take writedowns on euro debt?

Refinancing volume at a time when the real impact of Basel III is still not fully understood by all lenders. Rising cost of funds for banks in the context of this re-financing mountain. When will banks price their liquidity more effectively?

I don’t think double dip is the most likely outcome for next year but if it happens, the consequences will be severe as we have run out of policy options. Interest rates are near zero; we have tried quantitative easing and fiscal programmes are now a part of the problem, not the solution. Watching events in Europe certainly keeps us alive to the possibility that what was initially a private sector credit crisis has the potential to roll over to a full-blown sovereign credit crisis.

John Hourican
Chief executive, global banking and markets, RBS

This is always the most difficult question to answer because there is never one thing that properly articulates the answer. The economic recovery is fragile, markets are often choppy, sentiment swings around but we still have expectations to meet – customers, staff and shareholders. The industry is changing and we need to change with it.

Julian Treger
Founder, Audley Capital

What keeps me up is looking for signs that inflation is returning and getting out of control.

The legacy of debt we are leaving our children in most of the western world. Weak growth, poor employment prospects, higher future taxes, unaffordable and unfunded entitlements, underfunded pension plans to name a few issues that must be resolved soon. I have seen a few glimmers of hope that we can attack these challenges and understand the consequences, but we have to see if we have the political will to be honest about where countries stand today.

2008’s co-ordinated intervention by governments and central banks moved us from the brink of the abyss, but there are many unsettled issues arising from the borrowing binge of the last few decades that could yet again have us in trouble. Only a small amount of the debt has been unwound and many of the debtors are in questionable financial health – those who expect robust growth to bail us all out will have to explain where that growth will come from.

The real question going into 2011 is whether countries with large debt loads are willing and able to get their finances in order. While the worst hit so far have tended to be smaller economies, I worry this will spread to larger economies – perhaps even the United States – which could cripple the global economy. My hope is that world leaders have the political courage to take the necessary actions to put their nations on a path to sustainability.

The fear that politicians and legislators will turn back the clock on market liberalisation out of some misguided notion that this will protect the man in the street from financial crises. Instead this will hobble markets, restrict liquidity, make capital raising harder and ultimately hurt the very people in whose name they purport to be acting.

The primarily politically motivated discussions around the break-up of the euro. It’s very similar to the classic prisoner’s dilemma problem in game theory. A collaborative solution à la euro leads to a more optimal (albeit far from perfect) environment for wealth creation than the alternative of competitive devaluations and even worse macro-economic mismanagement that would surely follow the demise of the euro. Gains from currency devaluations would be short lived and in the end, just like in the prisoner’s dilemma problem, everyone would be worse off. The stuff of nightmares.

Alex McDonald
Chief executive, Wholesale Market Brokers’ Association

I am concerned that the new regulatory climate will seriously impact the liquidity of markets and their ability to properly function because of higher costs, position limits and eventually, price controls.

Our biggest threat keeping me awake is what I call the “financial services neutron bomb” effect. Given financial services is an ever more global industry, other destinations are making themselves deliberately more attractive to lure away business and make it attractive for companies to book their business in those jurisdictions. My nightmare is that the UK is left with the infrastructure but not the tax revenues or jobs. We need to ensure London remains one of the leading global financial services hubs, able to compete on an international stage.

I continue to worry that many investors still try to manage risk without thinking about what risk truly is. For a pension fund, risk is that the expected pensions will not be paid in full and that managing short-term funding level volatility is not necessarily a means of mitigating this risk; that tracking an index can be a much more risky strategy than an active strategy which aims to preserve and grow capital.

Nothing, but by day I worry about the tensions within the euro area, where they are trying to escape the triple contradiction of no exit, no fiscal transfers, no bailouts. If they do offer bailouts on this occasion, how do they credibly enforce the discipline of “OK, but just this once”?

I often go through my collection of old bond certificates, many of which are framed on the wall, complete with the original dividend coupons. As has previously happened during times of high inflation and/or defaults, there is a danger that today’s bond certificates will end up framed on the wall. Don’t buy any US Treasuries, Bunds or [Italian government bonds] BTPs just yet, you may find some at the local antiques shop in a few years time.

A nagging and persistent concern has to be the potential devastation that could be wreaked across the private equity landscape if consultants went highly negative on alternative investment. Unlikely perhaps, but still something that wakes me up now and then.

Where is all that printed money going to go? If it is not to drive product and service price inflation higher in the next year or two it will almost certainly be the rocket fuel for a number of asset market bubbles in the future. Debatably, it may already be behind a new rush into metals and emerging market assets regardless of type. I also have an uneasy feeling that when central bankers assure us that they have the means to reverse policy if needs be that means through a higher cost of money, in other words interest rates.

Ensuring the UK remains a centre of financial excellence and the natural home for international business is a subject close to my heart. A strong regulatory environment, a financial sector that supports entrepreneurs and small business and mechanisms that support the flow of capital are all essential for the long-term health of the UK economy. It’s crucial we protect London’s reputation as a premier financial capital and a home for international business.

At Citi we are better positioned than we have been in a very long time, but we are concerned about the operating environment in our industry. There remain many uncertainties on the business and the regulatory front and of course the sovereign debt situation. Overall, though, we are sleeping pretty well, the more so as we are very busy and the days are long.

Sometimes my young daughter! But I am concerned about ill-considered and politically supported moves to impede technical advances in trading and markets infrastructure. The US and Europe have created extraordinarily efficient, low-cost markets using technological expertise which barely existed 20 years ago. These fuelled growth and prosperity and should not be throttled now.

Thankfully, I don’t battle with insomnia – but top of mind for me is ensuring we have the right people, processes and platforms in place to deliver on client relationships. It may not be glamorous, but robust systems, tailored solutions and great fulfilment are highly valued by our clients as treasury services are the lifeblood of any commercial organisation. Technology too is fast moving so we also need to remain innovative there.

Huw van Steenis
Head of European bank and diversified financials research and global team leader, Morgan Stanley

I sleep well, but I do wake up thinking about how the mass of new regulation is something that may change what we can do for our clients. Many of the proposals are intended to rebuild trust in the financial system, but the unintended consequences of quickly implemented legislation should not be underestimated. With the political haste to put something in place, we hope what is done in the end does not just consolidate risk elsewhere or fails to be consistent across markets.

There are tectonic shifts under way as emerging markets claim an ever bigger share of global GDP, consumption and opportunity. I hope that the regulators, politicians and financial services industry keep abreast of this secular change, while grappling in the near term with the slow and volatile recovery of mature markets.

Jane Beverley
Principal and head of research, Punter Southall

Most people associate 2012 with the Olympics, but it’s also a big year for auto-enrolment in pensions and it’s imperative that companies start to get to grips with it this year. 2012 will see thousands of tiny businesses encountering staff pensions for the first time and a well-run communications campaign to ready companies is vital. A flurry of negative headlines would likely lead to hordes of opt-outs but auto-enrolment has many positive aspects for employees and this message must be spread.

That, after losing a lot of money in 2008, risk-averse retail investors seem to have piled a record amount into bonds. As the global economy grows and yields ultimately rise, they stand to lose again. The world is a more volatile place but most investors seem ill-prepared to deal with it. Investing is inherently risky, which is what makes it interesting and fun – and presents opportunities to earn excess returns.

Todd Ruppert
President of international investment services, T Rowe Price
I think ex-UK prime minister Harold Macmillan said it best when asked this question, “Events my dear boy, events”. It is to be expected that the unexpected happens with increasing regularity. There are numerous issues facing all of us, the ramifications of which are unknown, from unprecedented regulation to sovereign debt concerns to sustained high unemployment to exogenous shocks, and the list goes on. We need to be as effective as we can be with the things we can control and manage our business in a way that will enable us to manage through the circumstances beyond our control.

Wondering when investors will want to come back into the equity markets. It is imperative that we re-establish the integrity and fairness of the markets. There are a lot of competing interests in the equity markets today and market structure has to continue to evolve so that traditional investors don’t feel disadvantaged. Professional money managers must have the tools they need to keep their orders safe against information leakage and predatory trading.

Lance Uggla
Chief executive, Markit

The sovereign debt crisis and the contagion effect to other European countries. Now that Ireland has been bailed out, all eyes are on Portugal and Spain. So far risky assets have held up relatively well, given the volatility in sovereign CDS spreads. We don’t know if this will continue but we do know that the eurozone’s problems are far from over. This crisis could act as a drag on growth over the next few years.

Xavier Moreno
Chairman, Astorg Partners

My “micro” concern is making a wrong business analysis for our next investment; my “macro” concern is seeing the global financial markets run out of control again, if the gap between efforts made to reduce public deficits and efforts accepted by public opinion and voters remains huge.

Emmanuel Carjat
Chief executive, Atrium Network
At home, my youngest daughter who is five months old. At work, ensuring the continued growth of the company is matched to clients’ ever-changing demands, and ensuring we are well placed to anticipate regulatory developments and their impact.

The inability of developed countries to find a lasting solution for their economic woes. Monetary easing will only have a short-term effect. A cut in manufacturing costs and more focus on meeting increased demand from emerging markets would help. Another worry is the risk of food and commodity inflation in emerging markets as QE2 takes effect, forcing central bankers to raise interest rates aggressively. But the biggest single factor that could prevent emerging markets fulfilling their potential in the next five to six years is poor political leadership.

Building Permira for the next 25 years. The firm was set up 25 years ago and has made over 190 private equity investments in that period delivering great returns and over €18bn in cash to our investors. Tom [Lister, Permira’s other managing partner] and I spend a lot of time thinking about how we build on that track record and what the firm should look like in the next decade.